The UK communications regulator Ofcom has ordered BT’s network division, Openreach, to withdraw its proposed ‘Incremental New to Openreach’ offer.

The watchdog concluded that the heavy discounts could harm sustainable market competition and squeeze out smaller rival network operators.

Under the contested scheme, Openreach intended to reward internet service providers with monthly discounts of up to £9.50 per customer for up to 30 months for bringing new full-fibre users onto its network.

However, Ofcom ruled that the charges were not fair and reasonable, warning that other reasonably efficient operators would struggle to match such large price cuts while still recovering their costs.

Because the deal was aimed exclusively at new subscribers, regulators noted it could stymie independent alternative networks, known as altnets, from scaling their customer bases at a crucial time when roughly half of eligible households have yet to adopt full-fibre.

Alex Tofts, strategist at Broadband Genie, commented:

“While blocking Openreach’s wholesale discounts might seem counter-intuitive, denying major retail providers the opportunity to pass on immediate savings, it lowers the risk of squeezing out independent altnets that drive long-term competition.”

“Consumers rely on real market choice. Independent providers operating outside the Openreach footprint frequently lead the way on speed, pricing, and customer service compared to well-known providers. The key challenge now is ensuring this intervention doesn’t inadvertently drive up bills during a cost-of-living squeeze.”

Ofcom confirmed it is not intervening in several other smaller commercial offers notified by Openreach, as their lower discounts do not trigger similar competition red flags. Meanwhile, Openreach defended its initial proposal, stating it was put forward in good faith to enhance household value, though it will review the decision and proceed with its alternative plans.

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